November
29, 2011 �
SilverCrest Mines Inc. (the �Company� or �SilverCrest�) is pleased to
announce strong positive cash flow, earnings and operating results for its
third quarter ended September 30, 2011, being the second quarter
of commercial production at its Santa Elena Mine in Sonora, Mexico.
This press release should be read in conjunction with the Company�s
Management Discussion & Analysis, Condensed Consolidated Interim
Financial Statements and Notes to Financial Statements for the nine month
period ended September 30, 2011, available on the Company�s
website at www.silvercrestmines.com and on SEDAR at www.sedar.com.
All monetary figures are expressed in United Statesdollars unless otherwise
specified.
The results for the three month period ended September 30, 2011 is the
second quarter SilverCrest has reported production
revenues and expenses. First Quarter revenues and expenses were capitalized
to Santa Elena Mine assets.
Financial
Highlights
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Three
months ended
September 30, 2011
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Three
months ended
June 30, 2011
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|
|
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Revenue
reported
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$15,055,514
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$8,556,261
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Mine
operating earnings(1)
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$10,286,196
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$5,705,087
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Comprehensive
earnings before loss on non-cash derivative instruments
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$6,583,455
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$4,296,517
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Comprehensive
earnings
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$81,856
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$790,429
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Comprehensive
Earnings per share
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$0.00
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$0.01
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Cash
flow from operations before changes in working capital items
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$5,129,814
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$3,113,371
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Cash
and cash equivalents
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$32,122,284
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$33,320,876
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Cash
operating cost per silver equivalent ounce sold (2) (3)
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$7.27
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$8.27
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Operating
Highlights
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Tonnes
of ore mined
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248,192
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249,217
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Tonnes
of waste mined
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1,058,909
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707,553
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Waste/Ore
ratio
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4.27
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2.84
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Ounces
of silver produced
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106,636
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74,678
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Ounces
of gold produced
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8,805
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5,476
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Ounces
of silver sold
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96,631
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70,326
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Ounces
of gold sold
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6,102
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4,300
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1)
Mine
operating earnings have not been adjusted for non cash revenue which
consists of $4,681,312 (June 30 - $2,007,810)
from derivative instruments and $572,462 (June 30 - $322,725) from
deferred revenue.
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(2)
At
September 30, silver equivalence was calculated using market spot rates
of $1,620 (June 30 - $1,505.50) per gold ounce and $30.45 (June 30 -
$35.02) per silver ounce.
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(3)
This
is a Non-IFRS performance measure. Please refer to Company�s Management
Discussion and Analysis for further discussion.
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Highlights for the
Third Quarter Ended September 30, 2011
Third Quarter
Financial Highlights
Revenues reported from the Santa Elena Mine amounted to $15,055,514 (June 30 - $8,556,261). Silver sales were
96,631 (June 30 - 70,325) ounces at an average realized price of $37.44
(June 30 - $38.90). Gold delivered into the Macquarie Bank Ltd. (�MBL�)
Hedging Facility was 6,102 (June 30 - 3,440) ounces at an average realized
price of $926.50. Included in revenue is a non cash amount of $4,681,312 (June 30 - $2,007,810) representing the
difference between the market spot price at the date of delivery for gold
and the hedge price of $926.50 per ounce settled in the quarter. The
quarterly average market spot price at the time of delivery was $1,694
(June 30 - $1,510). The Company also recorded gold sales of $1,106,351 (June 30 - $623,705) related to the delivery of
1,525 (June 30 � 860) gold ounces to Sandstorm Gold Ltd. (�Sandstorm�),
which consists of $533,889 (June 30 - $300,979) in cash received and
$572,462 (June 30 - $322,725) from amortization of deferred revenue.
Cost of sales amounted to $3,652,887 (June 30 -
$2,109,801) which is a cash operating cost of $7.27 (June 30 - $8.27) per
silver equivalent ounce sold. Cash operating costs for the quarter were lower than the Santa Elena Life of Mine
budget projections. Depreciation, depletion and accretion amounted to $1,116,431 (June 30 - $741,373) which resulted in mine
operating earnings for the quarter of $10,286,196 (June 30 - $5,705,087).
Other net expense items amounted to $10,204,340 (June 30 - $4,914,658)
which primarily relates to loss on derivative instruments of $6,501,599
(June 30 - $3,506,089) and exchange loss (gain) in translation to US
Dollars $2,138,668 (June 30 � (57,731)). The Company used 0.9643 (CAD
Dollar) at June 30, and 1.0389 (CAD Dollar) at September 30, to translate
the financial assets and liabilities to US Dollars.
Under IFRS the Company�s derivative instruments are fair valued at the
financial position date with the resulting gain or losses included in the
operating results for the period. At September 30, the Company�s derivative
instruments were calculated using a forward gold price of approximately
$1,630 (June 30 - $1,517) per ounce.
Comprehensive earnings for the quarter were $81,856 (June 30 - $790,429) or
$.00 (June 30 -$.01) per share.
The Company made a loan repayment of $3.3 million from Santa Elena
production revenues to MBL and subsequent to September 30, made an additional
repayment of $2.3 million from production revenues. The Company has no
remaining loan obligations for fiscal 2011. The Company expects to
accelerate its loan repayment such that substantially all of the $4.8
million outstanding loan obligation will be repaid by December 31, 2011.
Cash and cash equivalents were $32.1 million (June 30 - $33.3 million) at
September 30, 2011 of which only $1.5 million is reserved as a Santa
Elena Mine funding obligation.
Third Quarter
Operating Highlights
Approximately 253,000 tonnes of ore were mined, crushed and delivered to
the pad at the Santa Elena Mine. The high grade ore (average grade of 2.20
gpt Au and 44.08 gpt Ag) of the Main zone is now
being mined and will provide the bulk of the ore to be mined for the
remainder of 2011. All aspects of the operations are at or above design
capacities, including the crusher. Crusher throughput averaged 2,755 tonnes
per day which is above the design throughput capacity of 2,500 tpd.
Production from Santa Elena mine is expected to be at a �steady-state� by
the end of 2011.
During the Third Quarter, silver production was up 43% to 106,636 ounces
and gold production was up 61% to 8,805 ounces compared to the Second
Quarter, with a significant amount of silver and gold still in solution for
processing and recovery. The Company sold 96,631 ounces of silver and 6,102
ounces of gold, which is a 37% and 42% increase over the Second
Quarter, respectively.
The Company delivered 1,525 (June 30 � 860) ounces of gold under its gold
stream contract with Sandstorm, and delivered 6,102 (June 30 - 3,440)
ounces under the gold price protection program with MBL. Results are
consistent with the Santa Elena Life of Mine budget projections for 2011.
J. Scott Drever, President stated; �We are certainly pleased with the
consistent progress being made at both the operational level at the Santa
Elena Mine and the financial results of the Company. The steady
increase in the overall operational statistics is now being reflected in
our financial performance. We have accelerated our debt repayment and still
have been able to maintain our strong cash position of $32.1 million. This
and our substantial cash flow assures that we can proceed with our 3 year
expansion plan to double production at Santa Elena and to implement the
Company�s growth strategy for corporate growth which includes accelerated
exploration of our exciting new La Joya discovery�.
Outlook for the
remainder of 2011
Santa Elena
Expansion
Drilling at the 100%-owned Cruz de Mayo Project, located near its Santa
Elena Mine in Sonora, Mexico, of approximately 45 core and RVC holes is
underway to reclassify and potentially expand current NI43-101 resources.
Approximately 15 holes have been drilled to date with the remainder to be
completed during the first quarter of 2012. These will be utilized to
upgrade the current resource estimate and to prepare a Preliminary
Feasibility Study (PFS).
The Company has finished drilling the four geotechnical drill holes at the
Santa Elena Mine to help establish geotechnical and hydrological parameters
for the proposed decline and subsequent underground development. The portal
site for the decline has been selected, and the initial underground
contractor proposals for the Phase I underground work, consisting of approximately
1,800 metres of main ramp and exploration drifting to commence in January
2012, are currently being reviewed. The decline will be used to access the
Main (Mineralized) Zone for further delineation drilling and access the
unexplored portions of the Main Zone for the potential expansion of
resources. When completed, the Phase I decline will allow development and
initial production from the deposit that lies below the ultimate open pit
limits. This work is being completed to a PFS for the Expansion Project
which includes construction of a conventional
mill.
La Joya Project
The Company is compiling and validating historical and current data through
an Independent Qualified Person for use in developing estimated resources
and a NI 43-101 Technical Report anticipated by the end of fiscal
2011. See News Release dated November 14, 2011.
A Phase II drilling program consisting of approximately 60 additional drill
holes (in excess of 10,000m) and 20 RVC drill holes has commenced, is
budgeted to cost approximately $3 million and be completed by mid-2012.
The Qualified Person under National
Instrument (NI 43-101) Standards of Disclosure for Mineral Projects
for this News Release is N. Eric Fier, CPG, P.Eng, and Chief Operating
Officer for SilverCrest Mines Inc., who has reviewed and approved its
contents.
SilverCrest Mines
Inc. (TSX-V: SVL) is a Mexican precious metals producer
with headquarters based in Vancouver, BC. SilverCrest�s flagship property
is the 100%-owned Santa Elena Mine, which is located 150km northeast of
Hermosillo, near Banamichi in the State of Sonora, M�xico. The mine is a
high-grade open pit, epithermal gold and silver producer, with an estimated
life of mine cash cost of $8 per ounce of silver equivalent (55:1 Ag:Au).
SilverCrest anticipates that the 2,500 tonnes per day facility should
recover approximately 4,805,000 ounces of silver
and 179,000 ounces of gold over the 6.5 year life of the open pit phase of
the Santa Elena Mine.
FORWARD-LOOKING
STATEMENTS
This news release contains
�forward-looking statements� within the meaning of Canadian securities
legislation and the United States Securities Litigation Reform Act of 1995.
Such forward-looking statements concern the Company�s anticipated results
and developments in the Company�s operations in future periods, planned
exploration and development of its properties, plans related to its
business and other matters that may occur in the future. These statements
relate to analyses and other information that are based on expectations of
future performance, including silver and gold production and planned work
programs. Statements concerning reserves and mineral resource estimates may
also constitute forward-looking statements to the extent that they involve
estimates of the mineralization that will be encountered if the property is
developed and, in the case of mineral reserves, such statements reflect the
conclusion based on certain assumptions that the mineral deposit can be
economically exploited. Forward-looking statements are subject to a variety
of known and unknown risks, uncertainties and other factors which could
cause actual events or results to differ from those expressed or implied by
the forward-looking statements, including, without limitation: risks
related to precious and base metal price fluctuations; risks related to
fluctuations in the currency markets (particularly the Mexican peso,
Canadian dollar and United States dollar); risks related to the inherently
dangerous activity of mining, including conditions or events beyond our
control, and operating or technical difficulties in mineral exploration,
development and mining activities; uncertainty in the Company�s ability to
raise financing and fund the exploration and development of its mineral
properties; uncertainty as to actual capital costs, operating costs,
production and economic returns, and uncertainty that development
activities will result in profitable mining operations; risks related to
reserves and mineral resource figures being estimates based on interpretations
and assumptions which may result in less mineral production under actual
conditions than is currently estimated and to diminishing quantities or
grades of mineral reserves as properties are mined; risks related to
governmental regulations and obtaining necessary licenses and permits;
risks related to the business being subject to environmental laws and
regulations which may increase costs of doing business and restrict our
operations; risks related to mineral properties being subject to prior
unregistered agreements, transfers, or claims and other defects in title;
risks relating to inadequate insurance or inability to obtain insurance;
risks related to potential litigation; risks related to the global economy;
risks related to environmental laws risks related to the Company�s status
as a foreign private issuer; risks related to all of the Company�s
properties being located in Mexico and El Salvador, including political,
economic, social and regulatory instability; and risks related to officers
and directors becoming associated with other natural resource companies
which may give rise to conflicts of interests. Should one or more of these
risks and uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in the
forward-looking statements. The Company�s forward-looking statements are
based on beliefs, expectations and opinions of management on the date the
statements are made. For the reasons set forth above, investors should not
place undue reliance on forward-looking statements.
The information provided
in this news release is not intended to be a comprehensive review of all
matters and developments concerning the Company. It should be read in
conjunction with all other disclosure documents of the Company. The
information contained herein is not a substitute for detailed investigation
or analysis. No securities commission or regulatory authority has reviewed
the accuracy or adequacy of the information presented.
�J.
Scott Drever�
J. Scott Drever,
President
For further information, please contact:
Fred Cooper
570 Granville Street, Suite 501
Vancouver, BC V6C 3P1
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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